The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Entities with absolute advantages can produce something using a smaller number of inputs than another party producing the same product. As such, absolute advantage can reduce costs and boost profits. A country has an absolute advantage over another in producing a good, if it can produce that good using fewer resources than another country. One need only to be able to make something at a lower cost, in terms of other goods sacrificed, to oneself to gain from trade.